Rich nations agreed to channel at least $300 billion a year by 2035 for developing countries to ramp up climate action under a new finance goal adopted at the COP29 climate summit, after bad-tempered talks in which vulnerable countries pushed for a bigger slice of the pie.

The new goal, which kicks in after 2025, replaces the existing annual target of $100bn, which was met two years late in 2022 and is widely seen as insufficient to meet rocketing needs among poorer nations to shift to clean energy and adapt to extreme weather and rising seas.

The $300bn goal – with developed countries “taking the lead” in providing money and mobilising private-sector investment – will be at the core of a wider effort to scale up financing to at least $1.3 trillion per year by 2035 “from all public and private sources”.

UN climate chief Simon Stiell described the new finance goal as “an insurance policy for humanity, amid worsening climate impacts hitting every country”.

“This deal will keep the clean energy boom growing and protect billions of lives,” he said, warning that “like any insurance policy – it only works – if the premiums are paid in full, and on time.”

In the closing plenary of the two-week summit, some developing nations, including Cuba and India, expressed dissatisfaction with the New Collective Quantified Goal (NCQG), criticising its “paltry size” and the weight given to funding from multilateral development banks. They said it does not respond to their requirements to grow sustainably and keep their people safe.

“The goal is too little. Too distant,” Chandni Raina, an adviser with India’s Ministry of Finance told the closing plenary. “The proposed goal shall not solve anything for us.”

Tina Stege, climate envoy for the Marshall Islands, said her Pacific island state was leaving “with a small portion of the funding climate-vulnerable countries urgently need”. “It isn’t nearly enough, but it’s a start, and we’ve made it clear that these funds must come with fewer obstacles so they reach those who need them most,” she added.

“Tale of delivery”

But EU climate commissioner Wopke Hoekstra told the plenary that COP29 would be remembered “as a start of a new era for climate finance”, saying the EU believes “it is ambitious, it is needed, it is realistic and it is achievable. We are confident this will be a tale of delivery,” he added.

The agreement came after a day of drama as the COP29 talks in Baku ran overtime, with groups of the poorest nations and small island states staging a temporary walkout, raising fears that a deal would not be reached at the so-called “Finance COP”.

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Those vulnerable groups wanted to ensure they would get fixed amounts under the new goal, arguing they are hit hardest by the impacts of global warming and have the least resources to protect their people and go green. In the end, they compromised, settling for a process that will explore options to “design and implement” allocation floors for them.

Baku to Belem Roadmap

That effort will be part of a “Baku to Belem Roadmap to $1.3 trillion” that will look for “additional resources” to drive low-carbon, climate-resilient development and support the rollout of developed-country plans for cutting emissions and adapting to climate change.

This roadmap, which will be developed over the coming year leading up to the COP30 conference in Belem, Brazil, was put forward by the African Group, Barbados, Colombia, Honduras and Panama in Baku this week.

Details remain sketchy but Colombia’s environment minister Susana Muhamad referred to “innovative possibilities that our countries have been working on”. A taskforce co-led by France, Kenya and Barbados, for example, has been considering how to introduce levies on shipping, aviation, fossil fuels and financial transactions.

Win for China, Gulf states 

The final COP29 deal on the new finance goal was a compromise between efforts by rich countries to limit the amount of additional government finance they will have to stump up – with many citing fiscal constraints – and the growing gap between funding and needs in climate-stressed parts of the world.

Developing countries rejected a strong push by wealthy governments to include their richer, more polluting members, especially China and Gulf nations, in the official donor base. The text only “encourages” developing countries to make contributions to the new finance goal “on a voluntary basis”.

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As the talks in Baku got dangerously close to ending without an agreement, the Azerbaijan presidency came in for sharp criticism for putting a proposed figure for the government-led core of the finance goal on the table too late.

It eventually did so on Friday, which should have been the final day of the two-week talks, with an initial suggestion of $250 billion a year provoking disappointment and anger from developing countries, who argued they were being forced to sacrifice their people.

Compromises

In the end, they settled for not much more in return for commitments to avoid worsening already high debt levels and easing access to funding, including from the UN’s dedicated climate funds. The text promises to pursue efforts to at least triple annual outflows from those funds from 2022 levels by 2030, rather than earmarking a percentage of the goal for them, as earlier proposed.

Developing countries also capitulated on demands for sub-goals to channel more money to under-funded work on adaptation, as well as repairing growing loss and damage from droughts, floods, storms and rising oceans. These sub-goals were left out of the agreed text.

Climate justice activists slammed the new goal for being far too low and failing to set a target that would prioritise grants over loans.

Champa Patel, executive director of governments and policy with the Climate Group, said $300bn a year “doesn’t even come close to the transformational finance needed to tackle the climate crisis”.

Don’t mention fossil fuels

As drama unfolded over finance, countries also adopted at COP29 a weakened decision on cutting carbon emissions, which failed to explicitly mention last year’s pledge to transition away from fossil fuels in energy systems. A second text on mitigation was postponed to mid-2025, after it was also weakened by opposition from Saudi Arabia. 

The adopted Mitigation Work Programme, a non-binding process meant to enhance climate mitigation, was adopted at the closing plenary. The adopted version fails to mention last year’s landmark decision to reduce reliance on fossil fuels, which it did include in earlier versions. 

A second text meant to be the main outcome on cutting emissions in Baku did not reach consensus, after also getting weakened. The “UAE Dialogue” follows up on last year’s review of climate policies known as the Global Stocktake (GST) – the main decision from last year’s COP in Dubai. 

The last version of the UAE Dialogue referenced “paragraph 28” of the UAE consensus, where the fossil fuel transition was included, but the text falls short of explicitly mentioning the landmark pledge to reduce fossil fuels. 

Instead, the latest draft reaffirmed the role of “transitional fuels” also mentioned in last year’s GST, which experts interpreted to mean fossil gas among other technologies.

Saudi Arabia successfully blocked any fossil fuel language at COP29, after their negotiators said at a plenary session on Thursday that they would “not accept any text that targets any specific sectors including fossil fuel”. The Saudi government has also blocked this in other major environmental summits, among them the biodiversity COP16 and the G20.

In the last draft, the COP29 presidency also removed two proposals to expand energy storage capacity to 1,500 gigawatts by 2030 and to add 25 million km of power grids by 2030. Both would have been new targets building on the decision to triple renewable energy capacity by the same date.

At the closing plenary, several country groups expressed their disappointment with the text and said they could not accept it in its current form. 

“We are concerned to see attempts to backtrack the agreements made last year,” said Chilean lead negotiator Julio Cordano. “The text does not enjoy consensus”.

“We made historic commitments a year ago, including to transition away from fossil fuels. We came here to translate that commitment into meaningful action, and quite simply, we have fallen short,” said a delegate from Canada.

In the end, COP president Mukhtar Babayev opted to defer the text until next year, when countries will review the process again in mid-year talks in Bonn. A final decision is expected at COP30. 

The UAE Dialogue was one of the key agreements meant to inform the upcoming round of new nationally determined contributions (NDCs). Most of them will now have to make progress without an explicit mandate from the COP.

As COP29 came to a close, UN Secretary General Antonio Guterres said in a statement that he “had hoped for a more ambitious outcome – on both finance and mitigation – to meet the great challenge we face. But this agreement provides a base on which to build,” he added.

(Reporting and editing by Megan Rowling, Joe Lo and Sebastian Rodriguez)